Into early European trading and the Euro is back on the defensive with bids in EUR/USD into 1.3595/3600 looking to prop the price amid the latest dip. Spot was seen as "heavy" overnight and EUR/JPY sales are said to have weighed but it has not been until the approach of the European open that the price finally managed to fill the support into 1.3610 and work lower.
Any further short-term weakness through 1.3600 may threaten the bottom area of 1.3565/70 but for the moment no such sell momentum has been seen. London dealers will once more look for sovereign support for the EUR on dips and it will be such support that helps form the base intraday with dealers also reporting stops below 1.3590 and again sub-1.3575.
The short-term risk-profile for the pair is formed by the EcoFin meeting in Brussels and the French industrial output numbers. German data is already in the pipeline with offers now seen into 1.3610/15 and 1.3630 to cap the topside.
Looking ahead, central bank speculations have returned but today it is the BoC and the impending BoJ verdict that hold the short-term focus. EUR/USD has only comments to work with but speakers from both sides are due on the roster. At 13:00 GMT the ECB Vice President, Papademos, is scheduled to take part in a media event in Brussels while at 17:00 GMT Fed Chairman, Bernanke, is set to discuss US inflation in Massachusetts.
With oil back above $70pb we at IFR look for the FOMC man to give some warning on the knock-on and thus the potential dangers of second-round pressures. Following this event-risk combo the ECB's Stark is due to speak in Frankfurt but the speech will be embargoed until 10:00 GMT on Wednesday.
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